This chapter is from the book

The Grocery Store with Invisible Patrons

Imagine a fairly normal grocery store, well stocked with cereal, milk, beer and wine, eggs, ice cream, canned goods, vegetables, fruits, and, of course, the usual assortment of treats near the register. Now imagine that the patrons and their carts are invisible. You see the door swing open when they arrive. You hear the cash register ring when they depart. You know what they bought. But everything else remains hidden. It would be hard to know how well the store was working and what you could do to make it better. Is it missing items or brands shoppers want? Is the store laid out in a way that makes life easy on customers? Does it maximize their purchasing behavior? Have you allocated the right amount of shelf space to each type of item? What might you do to get an individual customer to spend more or be more loyal?

These are the types of questions that merchandising experts have studied, pondered, and worked on for many years—since well before the digital world ever existed. Interestingly, they found that they could answer some of these questions even when the customers were, for all practical purposes, invisible. Equally interesting, they found that some types of questions are much harder to answer when you don’t know who your customers are and that, for many questions, the data might suggest possible answers but rarely provides definitive guidance.

Suppose, for example, that you found that the most purchased items in your store were milk, beer, eggs, and chips. You might be tempted to move all these items together in one place right at the front of the store. That should make it easy for customers to find what they need quickly and efficiently. Is that the way your supermarket is laid out, with the items you buy most right up front?

Chances are, it’s almost exactly the opposite. That isn’t because you’re invisible! Supermarkets work differently for two reasons. We’re all deeply cynical consumers, so you probably identified the first reason right away. Groceries aren’t set up for your convenience. They often place the things people purchase most at the very back of the store and might even consciously try to locate them far apart. If you’ve never made an impulse buy at a grocery store, this might seem odd. But if, like me, you’ve wandered by the dairy aisle and added some ready-to-bake cookies, or you’ve thrown a bag of chips next to your beer, it’s not too hard to see why this setup works. By trying out different store layouts and measuring how much people buy (their average cart), store designers can maximize total sales. Mind you, most grocery stores count on you to make your decision about where to shop based on other factors than how long it takes you to get your items. They know price, selection, and location are more important than convenience. If a new grocery store opened right next door and had the same selection and same prices, a store might well compete on the convenience of layout. But most stores see their layout as a chance to maximize their profits, not your time.

The second reason grocery stores aren’t laid out for your convenience is more interesting and more important than good old profit maximizing. Grocery stores have more than one customer. Guess what? They’re all different. When grocery merchandisers began to study what people bought (still without knowing who they were—only what was purchased on the same ticket), they found very distinct patterns. Beer and milk might be two of the most commonly purchased items in a grocery store, but they might not often be purchased together. Chips, on the other hand, go pretty well with that beer. And milk buyers are often looking to add cereal or eggs to their cart. So setting up a grocery with the most purchased items all clustered together might not work particularly well or be particularly convenient for anyone.

What’s more, even if a particular setup worked well for you today, it might not tomorrow. When merchandisers could only look at the receipts from each shopper, they had no way to tell how much people’s habits and shopping patterns varied. That’s a huge hole in their understanding. To get around that, grocery stores created loyalty programs so that, in return for discounts, they could tell what you bought every trip. They found that most people don’t shop the same way every time they visit the grocery store. Most of us have regular shopping expeditions when we buy everything we need and go up and down every aisle. Store layout might not be a big deal when we’re traversing every inch of the store (or, in my case, traversing two or three times as I remember things). But we also have visits when we’ve just run out of beer or milk—or, heaven forbid, both. We might stop to pick up lunch or to shop for specific recipe ingredients (my flour, bag of chocolate chips, vanilla extract, and egg visits). These are very distinct types of visits, and it would be great if the grocery store could make each type of visit perfect (or perfect for the grocer). Stores would love to be able to do that. But it’s hard to push those shelves around when you walk in the door.

Let’s not forget those chocolate bars and women’s magazines perched right at the register. Very few of us go to the grocery store with the express intent of buying a Snickers bar and a Cosmo, but many of us are tempted by one or the other. What spot in the grocery store do people have to linger at with nothing to do but be tempted? That’s where the candy (eye and stomach) goes.

We can learn a lot from those grocery store merchandisers when we start to think about the digital world. The straightest path isn’t always the best. The customer’s goals and your goals aren’t always identical. Not every product is the same, and some products are more position sensitive than others. A store doesn’t have one ideal layout because it doesn’t have one type of customer, and customers aren’t always going to do the same thing anyway. Last, and most important, what people actually do tells us a great deal about who they are and why they are doing those behaviors.